Combat Deal-Killing Low Appraisals
March 28, 2012
About one in three real estate contracts were canceled in January, up from 9 percent the previous year. Lowball appraisals are most to blame, agents say.
A recent article at Zillow points out how home owners may be able to improve their appraisal:
Gather about six comps ahead of time. Appraisers will pull their own comparables of recent sale prices to help determine the home’s value, but real estate professionals can walk sellers through at least six comparables beforehand in educating the seller about pricing the home. This can help prepare them for what an appraisal might show later too.
Show off upgrades. The appraiser will inspect the property and sellers and their agents should carefully consider what separate the homes that are similar from theirs. This may include a finished basement, the biggest yard on the block, or maybe its location in a scenic area. Sellers should "respectfully tell [the appraiser] what you know," treating them as a member of your team, says Sara Stephens, president of the Appraisal Institute. "It will increase the odds of your getting a fair and accurate assessment."
You can appeal an appraiser. Believe the appraisal was unfair? Most lenders allow home owners to challenge an appraisal they feel wasn’t done correctly, but home owners can't just say their home is worth more as their sole justification. Home owners will need to prove an error or omission, such as comps that should have been taken into consideration but weren’t (another reason to review those comps before). Home owners can also take their complaints to the state’s appraisal board if they feel their case isn’t being properly reviewed.
Updated: September 20, 2019